At the end of 2018, I was approached by artist ‘PBoy‘ about creating a Bitcoin puzzle inside a mural painting in Paris. As I was already a fan of his work, I was pleased to provide the seed funding of $1000 as the reward for anyone who was able to decipher the clues and access the BTC stored at the address disclosed publicly.

I should make it clear – I had no input beyond providing the initial prize funds. All credit for this wonderful and unique piece of art that engaged a broad audience goes to PBoy and his collaborators.

Work started on 2nd January 2019:

In the early hours of the 7th January, the finished piece was revealed to the world:

#StreetArt treasure hunt in Paris with a #Bitcoin puzzle
For the 10th birthday of the genesis block, I painted this frescoe in Paris with a 0,26btc ($1000) puzzle in it.
Here’s the public key: 1NqPwPp7hEXZ3Atj77Ue11xAEMmXqAXwrQ Thanks to @alistairmilne for sponsoring this 🙏 pic.twitter.com/F7aIkxmp6t

1/ Bitcoin is the reserve currency of the ‘crypto’ world. In the past 24hrs over half a billion USD of (non-fiat) tokens were traded vs BTC. Bitcoin’s market is deeper than any other by a country mile. No new token can compete with that.

Even if all the big altcoin exchanges added ‘B2X’ (for lack of a better ticker) pairs for everything (and they won’t for quite some time, if ever), they may never reach the volume vs Legacy BTC.

2/ Certainty vs uncertainty. Any new fork is plagued by questions over the dev team, roadmap, industry support, etc.. Legacy Bitcoin has no such questions as it has the longest track record and the largest pool of developers supporting it. As the most friendly towards decentralisation and true peer-to-peer architecture, it has the least chance of being shut down or heavily damaged by attempts at government control. The ‘Core’ development community is known to care about other issues like anonymity & censorship … we have no such information about those controlling the BTC1 Github repo.

3/ Track record. A lot of people have become rich while Core have maintained their position as the ‘default’ Bitcoin client. This buys a lot of loyalty from the very people that matter most … those buying and hodl’ing Bitcoin. People are unlikely to sell the token they trust the most.

4/ Investors vs Miners. A common thread among big-blockers is that miners are all that matter. Only their nodes count. Their decisions regarding forks are final. “We have 90% hashrate support”. All hail our miner overloads?

Sorry, but no.

It is the investment community … the traders, hodl’ers, users, etc. that put money IN to Bitcoin. Miners are for-profit organisations and therefore slaves to economics & subservient to the investors … they simply cannot and will not mine a coin at a loss for any length of time. Miners follow the money, they do not lead the money. This has never been illustrated more clearly than by Bcash and the joke that is their difficulty adjustment algo.

A rational miner fears the market negatively valuing the tokens they are trying to mine. They are extremely sensitive to profit & loss (no matter how rich they pretend to be). The richest people in Bitcoin are the Bitcoin hodl’ers … and they have no overheads.

When Bitcoin crashed to around $1800 over fears of a ‘split’ caused by UASF, the miners started to signal for BIP91 (SegWit activation) the very next day. Investors wear the trousers. QED.

5/ Forks / air-drops. The more of these that happen, the more people will want to hold Legacy BTC … as the coin that has the strongest history for such events.

6/ Development talent. No elaboration necessary.

7/ Businesses will not commit commercial suicide. The largest Bitcoin companies are already showing they will support both tokens in the interim and therefore allow the market to decide the victor. Advantage Legacy Bitcoin … a new token cannot practically be called Bitcoin / $BTC as that name is already taken and it would invite chaos. See the Coinbase and Bitfinex announcements.

… so, in the absence of enormous market manipulation (that would only succeed for a short time anyway – see Bcash), it is nearly unthinkable to anyone of sound commercial mind that $B2X trades above 1 BTC in value. Which therefore means it will not be the chain with the most cumulative work for any significant period … which means no-one will be able to sensibly argue it is Bitcoin.

The largest available futures market for $B2X currently values it at around 0.25BTC. I doubt the market is 300% wrong.

Whatever happens, I welcome the fact that those with differing opinions may support the fork/chain/dev team of their choice.

As I write, the mainstream media is starting to pick up on the Bitcoin Unlimited vs Bitcoin Core ‘split’ and get excited about the possibility of a contentious fork. Make no mistake, everyone hostile to the concept of Bitcoin is enjoying this. ‘Divide and conquer’ springs to mind.

FWIW, here is my idea of what a compromise might look like as a first step to reuniting the Bitcoin community. I doubt anyone will like it – but maybe people can live with it … or it might inspire other ideas for a more collaborative way forward.

First: Bitcoin Unlimited undertakes to implement SegWit (e.g. like Bitcoin EC might), which should allow its activation & the benefits that brings. Wallets representing the majority of Bitcoin Txs are SegWit ready, so hopefully fee pressure drops quickly. We all want that. If you don’t like SegWit, you don’t have to use it.

Second: some Bitcoin Core contributors and others *volunteer* to help Bitcoin Unlimited / Bitcoin EC. BU needs to be brought up-to-date to get the benefits from Core 0.14 code. It also needs rigorous peer review and testing. Break it and fix it, over and over. No-one wants to see Bitcoin nodes be taken offline en-masse. We all want Bitcoin to be robust.

Third: explore ways to prove EC works or enhance it so it does – e.g. as a sidechain (mergemined) or used to define the size of extension blocks. We need to think about the ways EC can be abused by bad actors and how to fix those problems. If time is spent fixing BU and addressing every concern, perhaps it can achieve consensus. Failing that, it could be useful in other ways.

Fourth: everyone stops the threats. I know people are passionate, but it just destroys confidence (and therefore value). We all need to think ‘how can I deescalate this?’ before speaking or writing.

Fifth: remember Bitcoin is not yours. Every Bitcoin business and influencer is partially responsible for the wealth of ~millions of people. Many of whom cannot afford to lose 50% due to forks or disputes & have no voice. Be responsible in your actions and words.

In short, lets prove the naysayers wrong … again. Consensus will not be achieved via threats or abuse from either side.

I thought I’d write a few thoughts about what the rational capitalists will likely do in the event of any Bitcoin hard fork that is remotely contentious:

1/ A far larger amount of Bitcoin will be deposited on exchanges than is usual, allowing investors to sell at will depending on how they interpret the events both before and after any hard fork.

Why is this interesting? Firstly, it risks a massive collapse in value if investors panic and bears smell blood. It is my view the at the recent PBoC panic is nothing compared to what might happen. Secondly, it means that a switch to Proof-of-Stake would make exchanges and investment funds the kingmakers (see point 7 below).

2/ ALL exchanges will support both coins … following the success of Ethereum Classic’s trading volumes (which had 0.5-1% of hashpower for a couple of days following the fork), exchanges will not want to miss out on the transaction fees nor have exposure to replay attacks, etc.. They will be prepared and ensure their clients have full freedom … the only way to avoid falling out of favour. We live in a world where PascalCoin can have $50million in volume traded in a few days … the chances of exchanges not supporting ‘both’ Bitcoins are near zero (there may be an exchange or two run by morons who don’t like money … they will go bust).

3/ While most people will sell for fiat currencies, I think Altcoins like Ethereum, Litecoin, etc. will likely surge (vs BTC) due to the uncertainty … altcoins are already seen as ‘hedges’ vs Bitcoin by many traders. People that were 90-100% BTC pre-fork may eventually re-buy to perhaps 60% (when the dust has settled). Doesn’t sound like much? Altcoins will move 100’s of percent. More than one will have a market cap above $1billion.

4/ After the inevitable crash, the obvious ‘pairs trade’ speculators will opt for is to sell the coin with less developer support, and buy the ‘Core’ chain. Like or loathe it, traders will play the odds and expect the non-Core team to have problems or, at best, very slow development. The non-Core chain will carry a ‘newbie’ discount while the new development team & adoption metrics are assessed by the market. Investors will prefer to buy the Core roadmap which includes changes required for Lightning and similar networks.

“You know what’s cooler than a billion Indians buying their vegetables with Bitcoin? Bitcoin being the settlement system for the $7trillion/day FX market … AND a billion Indians buying their vegetables with Bitcoin”

5/ The majority of miners will continue to limit block capacity on both chains. Regularly full blocks are worth at least 4-5x in transaction fees. They will continue to game the fee calculators used by most Bitcoin wallets. Those who believe larger blocks will bring about near-free transactions again will be disappointed. Only competition will force transaction fees down (i.e. optional settlement of a payment channel, sidechains, etc.)

6/ No-one will waste $millions trying to attack the minority chain. The worst ‘bad actors’ are likely to do is market sell their coins on that chain to hurt its value and discourage HODL’ing. This failed spectacularly with Ethereum vs Ethereum Classic even when only 1-3 exchanges traded it! Only a lack of investor/user interest can kill a coin (although they never truly die).

7/ If either chain comes under attack by hostile miners, you can expect a switch to a new PoW or hybrid PoW/PoS algorithm to make it very expensive and nearly impossible for them. If it was me forking against hostile miners, I’d also jump 3.5 years to have the next halving event immediately … likely creating a resurgence in investor and therefore profit-seeking miner interest. Existing users will love it.

8/ The customer is always right: both chains will survive as long as there is demand. Miners, exchanges, wallets/vaults, etc. merely follow the users. Users want the value of their investment to grow and will therefore invest in the most persuasive team/roadmap combination.

9/ Attempting to convince a bunch of libertarian Bitcoin believers to do something through force, blackmail or threats will backfire spectacularly. It is so obviously a bad idea for anyone that wants to retain their wealth and reputation that you wonder why some are concerned it might happen.